Brief Exercise 9-45 (Algorithmic)
Issuance of Long-Term Debt

Natalie Corp. provides medical supplies to hospitals located in Western Washington and Oregon. This year, Natalie Corp. issued 6,200 bonds with a $1,000 face value. The nominal rate for each bond is 7%.

Required:

Prepare the necessary journal entries to record the issuance of these bonds assuming the bonds were issued (a) at par, (b) at 103, and (c) at 96.

• What are the benefits of adopting international accounting standards for (a) investors, and (b) business enterprises?
• What are the potential risks associated with a move toward the adoption of international accounting standards in a nation

Kubin Company’s relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows:

Required:

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units?

b. What is the total indirect manufacturing cost incurred to make 25,250 units?

2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department?

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $95,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

b. What is the total indirect manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

• Required 1
• Required 2
• Required 3

2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

Show less

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $95,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Show less

Brand new auditors can be a problem and something that can slow the process down. Is there any disadvantage to having the same auditors every year?

Cardinal Company is considering a five-year project that would require a $2,860,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 14%. The project would provide net operating income in each of five years as follows:

2-a. What are the project’s annual net cash inflows?

2-b. What is the present value of the project’s annual net cash inflows? (Round discount factor to 3 decimal places.)

3. What is the project’s net present value? (Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.)

What is the project profitability index for this project? (Round discount factor(s) to 3 decimal places and final answer to 2 decimal places.)

Thank you

Furry Friends Supplies Inc., a pet wholesale supplier, was organized on May 1. Projected sales for each of the first three months of operations are as follows:

All sales are on account. 53 percent of sales are expected to be collected in the month of the sale, 35% in the month following the sale, and the remainder in the second month following the sale.

Prepare a schedule indicating cash collections from sales for May, June, and July.

Florida State University produces hats and sells them in the Book Store. On March 31, 2019, the Book Store has 1,000 hats in inventory. The hats are sold for $8.00. The Book Store’s policy is to maintain enough hats in inventory equal to 10% of next month’s sales. The Book Store anticipates the following sales activity for the second quarter of the year:

In addition, July’s sales are expected to be 9,000 units.

Required:

(use excel)

Please research what happened to the PCAOB in term of leaking of private data. What ethical values are involved? Opine on both the PCAOB controls and the hiring organizations. Please talk about how a trained CPA could get caught up in such a scandal.

Foxboro Company experienced an accounting event that affected it balance sheet and income statement in the following way:

Assets: -/+

Liabilities: NA

Equity: NA

Revenue: NA

Expenses: NA

Net Income: NA

Which of the following accounting events could have caused these effects on Foxboro's statements:

a. Purchase raw materials inventory on account

b. Transfer cost from work in process to finished good inventory

c. Recognize revenue from merchandise sold for cash

d. None of the above

On May 5, 2018, Sarah purchased a new office building for $2.5 million to use for rental purposes. After review of the appraisal, $100,000 is allocated to the value of the land. On November 3, 2018, she began to lease office space in the building. On March 4, 2023, Sarah sold the building. What is Sarah's depreciation deduction for 2018 and 2023?

Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division’s return on investment (ROI), which has been above 24% each of the last three years. Casey is considering a capital budgeting project that would require a $5,850,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company’s discount rate is 20%. The project would provide net operating income each year for five years as follows: Sales $ 5,200,000 Variable expenses 2,320,000 Contribution margin 2,880,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs $ 880,000 Depreciation 1,170,000 Total fixed expenses 2,050,000 Net operating income $ 830,000 Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the project’s net present value? 2. What is the project’s internal rate of return to the nearest whole percent? 3. What is the project’s simple rate of return? 4-a. Would the company want Casey to pursue this investment opportunity? 4-b. Would Casey be inclined to pursue this investment opportunity?

Ross Company has been in business for several years, during which time it has been profitable. For each of those years, Ross reported (and paid taxes on) taxable income in the same amount as pretax financial income based on the following revenues and expenses:

Ross was subject to the following income tax rates during this period: 2012, 20%; 2013, 25%; 2014, 30%; and 2015, 25%. During 2016, Ross experienced a severe decrease in the demand for its products. The company tried to offset this decrease with an expensive marketing campaign, but was unsuccessful. Consequently, at the end of 2016, Ross determined that its revenues were $60,000 and its expenses were $193,000 during 2016 for both income taxes and financial reporting.

Ross decided to carry back its 2016 operating loss because it was not confident it could earn taxable income in the future carryforward period. The income tax rate was 30% in 2016, and no change in the tax rate had been enacted for future years.

In 2017, Ross developed and introduced a new product that proved to be in high demand. On June 1, 2017, Ross received a refund check from the government based on the tax information it filed at the end of 2016. For 2017, Ross reported revenues of $181,000 and expenses of $155,000 for both income taxes and financial reporting. The applicable income tax rate was 30%.

Required:

Prepare Ross’s income tax journal entries on December 31, 2016. Additional Instruction

PAGE 1

GENERAL JOURNAL

Prepare the journal entry to record the receipt of the refund check on June 1, 2017.

PAGE 1

GENERAL JOURNAL

Prepare the income tax journal entry on December 31, 2017.

PAGE 1

GENERAL JOURNAL

Prepare Ross’s 2016 income statement. Include a note for any operating loss carryforward. Additional Instructions

Net loss: The company has a operating loss carryforward that can be used within years to offset future taxable income and reduce income taxes.

Prepare Ross’s 2017 income statement. Additional Instructions

what are closing attempts made at opportune times during the sales prezentation to encourage the customers to reveal readiness or objection to buying.

Fred currently earns $9,000 per month. Fred has been offered the chance to transfer for three to five years to an overseas affiliate. His employer is willing to pay Fred $10,000 per month if he accepts the assignment. Assume that the maximum foreign-earned income exclusion for next year is $105,900.

1. How much U.S. gross income will Fred report if he accepts the assignment abroad on January 1 of next year and works overseas for the entire year?

Income Reported:

2. If Fred’s employer also provides him free housing abroad (cost of $20,000), how much of the $20,000 is excludable from Fred’s income?

Amount to be excluded:

2b. Suppose that Fred's employer has offered Fred a six-month overseas assignment beginning on January 1 of next year. How much U.S. gross income will Fred report next year if he accepts the six-month assignment abroad and returns home on July 1 of next year?

Income Reported:

c-1. Suppose that Fred’s employer offers Fred a permanent overseas assignment beginning on March 1 of next year. How much U.S. gross income will Fred report next year if he accepts the permanent assignment abroad? Assume that Fred will be abroad for 305 days out of 365 days next year.

Income Reported:

c-2. If Fred’s employer also provides him free housing abroad (cost of $16,000 next year), how much of the $16,000 is excludable from Fred’s income? Assume that Fred will be abroad for 305 days out of 365 days next year.

Amount to be Excluded: